OAH-85-001-MBG
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE OFFICE OF ADMINISTRATIVE HEARINGS
in the matter of the Proposed
Adoption of Amendments of Rules REPORT OF THE
of the Office of Administrative ACTING CHIEF ADMINISTRATIVE LAW JUDGE
Hearings Governing Rulemaking and
Contested Case Proceedings.
The above-entitled matter came on for review by Allan W. Klein, acting as
the Chief Administrative law Judge for purposes of reviewing this case
pursuant to Minn. Stat. SS 14.15, subd. 3; 14.16, subds. I and 2; and Minn.
Rule 1400.1000. The Report of Administrative Law Judge Melvin B. Goldberg
(hereinafter "ALJ's Report") was received on February 20, 1985.
Minn. Stat. S 14.15, subds. 3 and 4, provide:
Subd. 3. Finding of substantial change. If the
[administrative law judge's) report contains a finding that a
rule has been modified in a way which makes it substantially
different from that which was originally proposed, or that the
agency has not met the requirements of sections 14.131 to 14.18,
it shall be submitted to the chief administrative law judge for
approval. If the chief administrative-law judge approves the
finding of the administrative law judge, the chief
administrative law judge shall advise the agency and the revisor
of statutes of actions which will correct the defects. 'The
agency shall not adopt the rule until the chief administrative
law judge determines that the defects have been corrected.
Subd. 4. Need or reasonableness not established. if the
chief administrative law judge determines that the need for or
reasonableness of the rule has not been established pursuant to
section 14.14, subdivision 2, and if the agency does not elect
to follow the suggested actions of the chief administrative law
judge to correct that defect, then the agency shall submit the
proposed rule to the legislative commission to review
administrative rules for the commission's advice and comment
The agency shall not adopt the rule until it has received and
considered the advice of the commission. However, the agency is
not required to delay adoption longer than 30 days after the
commission has received the agency's submission. Advice of the
commission shall not be binding on the agency.
Based upon a review of the record in this proceeding, the undersigned
hereby approves the Report of the Administrative Law Judge, except as
specifically noted below.
1. Pages 28 through 31 of the ALJ's Report deal with the Office's
proposed changes to Rule .0500, the rule relating to the Statement of Need mid
Reasonableness. At page 31, the ALJ finds that the Office's withdrawal of
paragraphs A, B, and C of subpart 1 of the rule (commonly referred to as the
"CBA" provisions) constitute a substantial change.
This finding raises the issue of when an agency's withdrawal of a proposed
rule can constitute a substantial change. Minn. Stat. sec. 14.05, subd. 3
(1984), provides that an agency may withdraw a proposed rule "any time prior
to filing it with the Secretary of State.' But Minn. Stat. sec. 14.51 (1984)
provides that the Office shall adopt rules for recessing and reconvening new
hearings when "the proposed final rule of an agency is substantially different
from that which was proposed at the public hearings.'
Agencies ought to be allowed to "float ideas" in proposed rules, and then
withdraw those ideas if the public response is negative, without violating the
substantial change doctrine. However, there are exceptions and qualifications
to that generalization. In some cases it becomes a matter of evaluating the
degree to which the withdrawal affects other rules. In this case, there is
both a statute and an existing rule which mandate the preparation of a
Statement of Need and Reasonableness. Minn. Stat. sec. 14.131 (1984) and Mimi.
Rule 1400.0500. As the ALJ's Report noted, the withdrawal of the CBA
provisions essentially returns the rule to its existing form, a return to the
status quo. In addition, the proposed CBA provisions do not affect any other
rules or procedures in the rulemaking process. They are not so inextricably
interwoven with others that the withdrawal constitutes a de facto amendment of
other rules. Under these conditions, the undersigned finds That the
withdrawal of the CBA provisions is not a substantial change. They may be
withdrawn.
The interrelationship between the concept of withdraw and the concept of
substantial change is one which ought to be further clarified in a rule. It
is not possible to do so at this stage in the process of these amendments, but
the Office ought to consider, along with other interested parties, the
advisability of adopting a rule to more clearly specify the relationship
between withdrawal and substantial change.
2. At pages 48 through 54 of his Report, the ALJ dealt with a number of
issues relating to the rulemaking record, and particularly the transcript of a
rulemaking hearing. He noted that two rules, Rule .0900 and Rule .0950,
should be considered together because they are are related. The ALJ found
that certain material proposed to be deleted from .0900 ought to have been
included in .0950, and that the agency's failure to do so, coupled with its
failure to make an affirmative showing of the necessity or reasonableness of
the deletion, constituted a defect. The ALJ also found that the Office had
agreed to make certain changes suggested by members of the public, but had
failed to supply any specific language to implement that agreement. Finally,
the ALJ stated that it would be 'appropriate" to define the cost of a copy of
the transcript obtained from the OAH after an original transcript has been
prepared by the term "at the cost of reproduction, rather than "at a
reasonable charge'. It is unclear from the ALJ's Report whether he is merely
recommending that the Office consider this language change, or whether he
finds that the proposed rule would be defective without it.
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Specifically at issue is language proposed for deletion in Rule .0900
which states, essentially, that if a transcript has been prepared, a copy
will be available to any person requesting it at a reasonable charge to be set
by the Chief Administrative Law Judge.
In its Statement of Need and Reasonableness, the Office stated that the
deletions to Rule .0900 relating to the provisions for court reporters and
transcripts 'are covered by statute as well as by the new rule which follows
(a reference to rule .0950). In its comments filed at the close of the 20-day
period, the Office stated that Rile .0950 attempted to simplify the language
of the rule by "deleting language now contained in the statute.' Ex. 37, at 4.
A review of SS 14.52 - 14.54 indicates that the statutes do cover some of
the deleted material in Rule .0900, but not all. In particular, they do not
cover the question of who pays for a copy after the original has been
prepared, and how much must be paid. That issue is dealt with in the language
proposed for deletion in Rule .0900. Since it is not dealt with in either the
statutes or the new Rule .0950, the undersigned approves the finding of the
ALJ that the Office has failed to demonstrate the need for or reasonableness
of that part of the deletion.
In order to cure this defect, the Office must add language to the rules
(logicially it would be added to Rule .0950) to indicate that if a person
requests a copy of the transcript after it has been ordered ay someone else,
how the copy may be obtained, and what the charge will be. Because the ALJ's
Report did not clearly indicate that the substitution of "at the cost of
reproduction" was a required change in order to cure a defect, the Office has
the option of using either the existing language in the old rule or the
substitute language which the ALJ found to-be more appropriate.
3. The undersigned notes that there may be a typographical error in
proposed Rule 1400.5500, in the last paragraph. The twelveth word presently
reads 'from'. It would appear that it ought to read 'for'.
4. At page 83 of his Report, the ALJ finds that mediation in connection
with rulemaking "is beyond the OAH's lawful authority and cannot be found to
be reasonable'. It is unclear whether the ALJ intended to communicate one
defect (lack of statutory authority) or two separate defects (statutory
authority and unreasonableness). The undersigned approves the finding of lack
of statutory authority. However, the undersigned does not approve a finding
of unreasonableness.
With regard to reasonableness, the record contains a number of submissions
discussing the use of negotiated rulemaking in other parts of the country.
See, for example, Ex. 21, attachment from Environmental Science and Technology
and Ex. 32. While there were some problems with the original version of the
proposed rule which were pointed out by commentators, the ALJ found that the
office had cured those problems. The undersigned can find no basis for
concluding the rule to be unreasonable. However, since the statutory
authority finding is approved, the rule must be redrafted to exclude the use
of mediation in rulemaking cases.
5. At page 88 of his Report, the ALJ found certain proposed amendments to
Rule .6200, dealing with intervention, to be unreasonable "unless reference is
made to specific statutes authorizing public [interest) intervention or more
specific criteria is used to define the rule*.
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This language is essentially taken from Ex. 23, at p. 14. That comment
points out that the Office's proposal, to allow intervention where
"petitioner's participation is in the public interest', is vague.
An examination of the Statement of Need and Reasonableness and the
office's post-hearing submission (Ex. 41) indicates that the intent of the
Office in inserting the "public interest' language was far narrower than the
language suggests. The intent was to recognize the fact that a number of
statutes and court decisions have created a right of intervention.
The undersigned approves the finding of the ALJ. In order to cure the
defect, the rule must be redrafted using narrower language. An example of
such narrower language would be 'or that petitioner's participation is
authorized by statute, rule or court decision'.
6. At page 104 of his Report, the ALJ finds that proposed Rule .7050,
relating to sanctions in discrimination cases, contains one defect based an
statutory authority, and a second defect based on reasonableness.
The undersigned approves both findings.
In order to cure the statutory authority defect, the rule should be
rewritten to allow sanctions to be imposed only upon 'any charging party or
respondent'.
In order to cure the reasonablenss defect, the provision in subpart 1.C.
relating to "five working days' should be changed to "ten working days".
In order to correct the defects enumerated by the Administrative Law
Judge, the Office shall either take the action recommended by the
Administrative Law Judge or the undersigned, or reconvene the rule hearing if
appropriate. If the Office chooses to reconvene the rule hearing, it shall do
so as if it is initiating a new rule hearing, complying with all substantive
and procedural requirements imposed it by law or rule.
If the Office chooses to take the action recommended by the Administrative
Law Judge or the undersigned, it shall submit to the undersigned a copy of the
rules as initially published in the State Register, a copy of the rules as
proposed for final adoption in the form required by the State Register for
final publication, and a copy of the Office's Findings of Fact and Order
Adopting Rules. The undersigned will then make a determination as to whether
the defects have been corrected and whether the modifications in the rules are
substantial changes.
Should the Office make changes in the rules other than those recommended
by the Administrative Law Judge or the undersigned, it shall also submit the
complete record for a review on the issue of substantial change.
Dated: February 28th 1985.
ALIAN W. KLEIN
Acting Chief Administrative Law Judge
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